Here’s the thing, if you can’t spot the sucker in the first half-hour at the table, then YOU are the sucker - Matt Damon in Rounders
The third Wednesday of July is normally a warm day in San Diego. It’s a special day for nearly 50,000 adults looking for a reason to skip a midweek work-day, dress up in seersucker suits and fancy hats, and try their luck at the "sport of kings". It’s opening day at Del Mar...where the Surf meets the Turf...
They will scream at the top of their lungs as the horses turn for the stretch run. If the players picked a winner they will curse themselves for not wagering more money on a sure thing. If they lost, they will curse themselves for not selecting the seemingly obvious choice in the race.
"Of course...why didn’t I notice that!?", they will mutter to themselves, just before turning the page of the program to the next race and the new information before them.
A few weeks back, I was having dinner with a good friend. We were discussing the remote possibility of California actually splitting into two different states (a far-out idea that makes for sensational headlines and news entertainment). I suggested to my friend that this idea is indeed possible. He was taken aback with my remark.
"You really don’t believe that this could really happen do you?", he gasped.
I replied, "No...I don’t...but ANYTHING is possible...it’s just not probable".
In fact, most everything is possible...the earth could be struck by an asteroid tomorrow...OptiFuse could get a $100 million fuse order one day...my son could take out the garbage without being told...the Cubs could actually win the World Series!...
However...these things are also extremely and remotely improbable.
In certain games of chance such as blackjack, roulette, and craps, the probability of a certain outcome is a fixed number. There are only 36 outcomes when a person rolls two dice or 38 outcomes on the spin of a roulette wheel (36 numbers + 0 & 00). These are known quantities and the casino (house) pays a player a slightly lower return than the actual odds of winning (for example, in roulette, the odds of selecting a particular number is 38 to 1but the house pays only 35 to 1 to a winner...a clear advantage to the house).
In other forms of gambling, the odds of winning are fixed, but the payouts can fluctuate. This is the case in state run lotteries where the odds to win are the same for each drawing but the prize is determined by previous drawings and the accumulated prize pool.
In the case of horse racing, pari-mutuel betting occurs. The odds (and subsequent payouts) are solely determined by the pool of betters. Therefore, the best horse in a race could become the longshot if the betting public decides to place their wagers on other horses in the race (such as the horse with a girl jockey dressed in pink silks). The "house" doesn’t make its money on a spread between the actual odds and the payouts, but rather by taking a percentage of the overall pool of money spent on a particular race (sometimes as much as 40%!).
When a person goes to a casino, they understand that they are not smarter than the house because the odds of winning are predetermined (and in the casino’s favor). They hope to win because they believe that they can get lucky and overcome the odds (in the short term) and come out a winner.
People who gamble on the ponies are different. They truly believe they are smarter than the general public. The other gamblers are emotional bettors who know nothing about the nuances of handicapping, the trainer and jockey statistics, the track biases, and/or the speed ratings. These "professionals" believe that they can select a horse to bet on that is better than the odds being offered by the race track because of the pari-mutuel betting and because the other gamblers are stupid.
The truly interesting thing is that almost EVERYONE at the horse races believes that they are that knowledgeable handicapper and that everyone else is the sucker.
The reality is that every horse entered has a chance to win a particular race. Although if might not be probable...it’s still very possible...and the real professional player knows this fact.
In the United States, 4 out of 5 businesses will fail within the first 5 years of operation. And of those surviving 20%, another 80% will fail within the second 5 years, leaving just 4% of entrepreneurial enterprises still operating after 10 years (this number is even smaller in certain industries such as restaurants and bars).
Millions of new products will be introduced each and every year. Most will ultimately fail. Some will fail with dramatic fashion - with lots of funding and marketing expertise behind the brand...anyone remember "New Coke"... Webvan.com?... Apple’s "Lisa" computer?...the Ford Edsel?
With such slim odds, why are millions of businesses and products launched year each and every year?
People start businesses and launch new products, because unlike casino games, the odds of winning are not inherently fixed. The odds of creating a successful business are more like pari-mutuel wagering where the odds (and subsequent rewards) shift to those with supposed knowledge and experience.
Many times, skill, experience and determination will indeed win out.
Other times it’s just being at the right place at the right time.
Anything is possible...
Thank you for your support of OptiFuse as we celebrate our 10-year anniverary - proud to be a member of the 4% club.
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